Page 13 - MEOG Week 19

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Saudi Advanced Petrochemical sees 36% slump in Q1 profits
saudI araBIa
NET profits at Saudi petrochemicals producer advanced Petrochemical slumped in the first quarter, on the back of weaker sales.
Demand for polypropylene, used to man- ufacture a range of consumer and industrial products, has seen a sharp fall in recent months due to the coronavirus (COVID-19) pandemic. advanced saw its polypropylene sales vol- umes drop 8% year on year in the first quarter, while prices fell 10.3, it said in a Saudi bourse statement.
Net income came to Sar104.3mn ($27.8mn), down 35.6% year on year and down 45.7% quar- ter on quarter. Its overall revenues tumbled 17.5%, landing at Sar535mn.
The pandemic has disrupted the plastics manufacturing chain, leading some companies to halt to down production, which in turn has lowered demand for polypropylene and other feedstocks. Longer term, demand is expected to fall this year owing to the broader economic implications of the crisis, although some
producers have been in a position to benefit from a spike in demand for face masks and other per- sonal protective gear.
advanced produces around 455,000 tonnes of propylene and 450,000 tonnes of polypro- pylene per year at its production facilities in the industrial city of Jubail of Saudi arabia’s east coast. The company recently signed a deal with South Korea’s SK Gas to build and operate new plants for polypropylene and propane dehydro- genation – a project worth $1.8bn.
While advanced remained in the black in the first quarter, Saudi arabia’s top petrochemicals firm SaBIC was not so fortunate. The state- owned company suffered its second quarterly loss in a row the three months ending March 31, reaching Sar950mn.
SaBIC’s revenues were down 18% year on year, and it suffered Sar1.07bn in impairments, mainly relating to its decision to halt production of plastic material ULTEM at its plant in Carta- gena, Spain.™
PolICy
Saudi gains edge in oil market after price plunge
saudI araBIa
THE uneasy truce that settled over oil markets this month as some of the world’s largest produc- ers began cutting output belies the raging com- petition among exporters seeking to preserve their share of a diminished market.
Saudi arabia, the world’s biggest exporter, appears to be winning the fight for sales as it slashes prices for its crude. Producers globally are struggling to retain customers as the coro- navirus (COVID-19) destroys demand for fuel. after flooding the market in april, producers are now scaling back shipments as part of the deal by OPEC+ suppliers to soak up the glut in oil.
as evidence of where riyadh has been win- ning, Saudi arabia was the only one of OPEC’s top four producers to boost sales to India in april. The kingdom’s shipments to China also doubled, and its exports to the US reached 1mn barrels per day (bpd), the highest since august 2018. “The Saudis are doing very well,” said ahmed Mehdi, a research associate at the Oxford Institute for Energy Studies (OIES), referring to the battle for buyers. “aramco has
been aggressive in protecting market share in asia.”
State oil producer Saudi aramco slashed its official selling prices for april crude sales to some of their lowest levels in decades, under- cutting rivals. For cargoes loading for asia in May, aramco cut pricing even further, and it is expected to widen discounts to that region for June.
That helped aramco to place its crude even amid a surge in supply. Saudi exports to China more than doubled in april to 2.2mn bpd, the highest level since tracking flows began at the beginning of 2017. Shipments to India, at 1.1mn bpd, were also the highest in at least three years.
The case of India highlights Saudi gains. Iraq, the second-biggest member in the Organization of Petroleum Exporting Countries, has edged the Saudis for the top spot in oil sales to the South asian country for most of the last three years.
Last month, however, Iraq’s exports to India plummeted to their lowest since June 2018 as the South asian country shut down much of
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